The Irish Rugby Football Union should have a new kit sponsor on board by the end of the summer, Chief Executive Philip Browne has revealed.
Puma have bought out of their reported €40m contract with the Union — which was to run up to 2017 — and paid a once-off compensation payment of Euro €11.5m. It was described only as an “exceptional item” in the accounts released at yesterday’s AGM at the Aviva Stadium.
Browne confirmed negotiations have been ongoing with other high profile kit providers and said he expected a deal would be firmed up within weeks.
That will surely come as good news to the Union who will be forced to borrow up to €25m to fund day-to-day activities in the lead-up to the release of premium ten year ticket packages in 2020, following a lukewarm reception to a recent offering which yielded just €14m instead of a hoped for €40m.
“The market has spoken, we are running a cash deficit each year and so for the next six years until the point where we sell the next block of premium seats we’re going to have to borrow to cover that annual cash deficit, ” said Browne.
The CEO admitted the Union would continue to tighten the belts, saying: “We’re always looking at our cost base but we will continue to operate at the levels we’re operating at the moment. So we will continue to fund four provincial teams, the national team and the domestic game; it’s business as usual but we will have to borrow to cover ourselves for the next six years.
“In six years’ time, when we sell those premium seats for the second time, we will have 5,000 of the best seats in the house available for sale. The last time we raised €70m and even being prudent, saying we might only sell half of them and at a lower price, we will still be able to cover off the bank borrowings.”
Earlier, Union Hon. Treasurer Tom Grace, a former Irish International, highlighted the challenges facing the organisation and admitted it wasn’t in the grand plan to look to the banks for ready cash.
The fact that only 50%of the current bulk sale had been achieved was, he said, a disappointment but not disastrous and he expressed confidence that the national team would, as it must, continue to provide the IRFU with the returns required to fund the game at all levels.
He said resources must continue to be diverted to the national team, whom he described as the key provider for all activities undertaken by the Union.
“There is absolutely no doubt that times are hard, but we’re extremely fortunate that we ran our business conservatively over the last number of years. We need to continue to develop the game, to make sure that the support of our fans and customers continues.”
Whilst reporting the €14.9m surplus, down to €3.4m once the €11.5 Puma pay-off was deducted, the IRFU’s operating cash flow surplus fell from €2.4m to a deficit of €4.5m.
Last year, outlined Grace, the running of the game cost the Union €33m, with funding of €23.4m to Connacht, Munster, Leinster and Ulster, and €9.5m to other representative teams, Branches, clubs and schools.
There was a significant increased spend on women’s rugby relating to the World Sevens, following a hugely successful Six Nations Grand Slam winning campaign in the 15-aside game.
Meanwhile, Browne has challenged the English clubs to justify the stance they have taken to threaten the future of the Heineken Cup in its present form.
“The ERC situation is tricky,” he admitted, “the shareholders have had various meetings since last September and they have probably been less than fruitful for a variety of reasons.
“There has been a bit of misinformation floating around in the market place — or in the media — in relation to it. There has been some nonsense in the media. I presume it comes from the English clubs, suggesting that ERC aren’t entitled to sell the rights for future competitions. That’s nonsense because it has been done in the past.
“I mean how else do you secure your future other than to sell your rights, it’s also strange that they take that point of view given when they’re a shareholder and had representation on the board when the decision was rightly taken .
“I think it’s also bizarre when you think that they, having castigated ERC for selling the rights, then went off an sold the rights for all matches involving English teams in England, Scotland, Wales and Ireland to BT Vision without regard to the Irish, Welsh, Scottish or indeed to the English Union.”
*The new President is Pat Fitzgerald, a long time member of the IRFU executive committee who last night succeeded Billy Glynn. Mr Fitzgerald’s home club is Longford RFC.
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